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Carbon Trading Scheme experiments are happening in industrial sector markets, like ETS, that allow carbon dioxide-emitting industries to buy credits. They are also also being experimented with in consumer sector markets, with efforts like TerraPass.

The BBC recently reported about the state of ETS in Europe's industrial sector carbon market, and raised some questions about possible shortcomings and flaws in the system. Some of the issues raised by the BBC report included allowance for emission levels for polluters being too loose, and therefore not significantly decreasing the amount of carbon emitted over time. Another emerging issue is that that uncertainty is causing too much volatility in the carbon markets and discouraging investment. A third issue raised is that "outsourcing" pollution solutions encourages "business as usual", and so potentially keeps businesses entrenched in patterns of carbon pollution. A final issue is that carbon markets are largely limited to industrial and some consumer sectors, and fail to address carbon emissions from the vast transport sector (trucking, air traffic, shipping, etc).

So my question is: Can a literacy of cooperation, and possibly applications of technologies of cooperation inform these trading schemes? These emerging issues in industrial carbon trading markets are definitely social dilemmas, and are definitely a multi-faceted problem that covers the many of the areas that the CooperationCommons project is working with. Areas of knowledge that we are covering include Anthropology, Biology, Business, Computer Science, Cultural Evolution, Economics, History, Information, Law, Mathematics, Political Science, Psychology, Sociology, and Technology, and all of these disciplines are related to the emerging issues in the industrial carbon markets.

I would argue that a huge portion of the root of the problem is a failure in the industrial carbon market system structure to recognize the psychology and sociology aspects of the users of their systems. A carbon market system of must recognize and be able to effectively deal with the motivations that cause people to want to bend it's rules and structures in their own favor. The carbon trading system system must recognize the reasons why the people running industries want to continue with "business as usual". The origins of these motivations stem from the nature of the culture of many of the industries. They are generally centered around making as much money as possible, while spending the least amount of money possible to do it. If we look at corporate history over the last two centuries, we know that industries and corporations have shown an effective ability to manipulate regulatory bodies and markets to work in their favor, many times at the expense of the greater common good. It makes sense that a carbon credit system could potentially give them a loophole to increase emissions if they can figure out a way to offset the costs of the credits in their books. This would then hijack the overall goal of of the industrial carbon market, because overall global emissions might increase faster than they can be offset.

Another consideration is the clean energy innovator's motivations. It's nice that money used from purchasing carbon credits goes toward developing clean energy. However, we know that it's possible to throw millions or even billions of dollars of money, time, and resources at ideas that turn out to be unworkable. How can we know that carbon markets are putting money towards what are likely the best plausible new clean energy technologies, so that they offsetting goals can be reached? What are the goals of the people and groups who are innovating in this area? Why are they doing things the way that they are doing them?

The same basic questions an be applied to the current consumer emissions. There has been a lot of discussion lately about emerging consumer emissions systems, like the Ford/TerraPass Greener Miles program.

Recognizing the driving motivations plays an important role here in the consumer realm, too. Why do consumers go for something like TerraPass? Why do some industries actively support the idea? The motivations for individual consumers, for instance, may range from egalitarian/humanistic reasons, such as giving something now so that everyone can gain now, to even religious reasons, such as those who feel they are "sinning" by destroying the environment. Recognizing these motivations is key to understanding the psychological aspect of cooperation literacy as it applies to this social dilemma. And, it is key to refining how these systems can work effectively.